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EUR/GBP is currently showing a bullish rejection after breaking above the 0.8550 resistance level. GBP is quite stronger than EUR in light of positive fundamental data published in the UK today. UK Average Earning Index came in as expected at 2.4% which previously was at 2.3%. Claimant Count Change decreased to 19.4k which previously was at 33.5k. Unemployment Rate was better than expected at 4.6% which was at 4.7% previously. On the other hand, the economic calendar contains positive reports from the eurozone. Italian Trade Balance report came in at 5.42B which was expected to be at 1.97B. Final CPI report was unchanged at 1.9% and Final Core CPI was also unchanged at 1.2%. Comparing the positive impact on both curencies, GBP has an upper hand over EUR in this pair. GBP is expected to advance further in this pair against EUR in the short run.

Now let us look at the technical chart. The price has already rejected buyers in this pair after the UK presented positive Unemployment Rate report and Average Earning Index. Currently the price is expected to move down towards 0.8550. If the price breaks below 0.8550 with a daily close, then we will consider sell positions with a downward target at 0.8420. On the other hand, if the price rejects off the 0.8550 support level, it would be wise to plan buy positions with an upward target towards 0.8780 – 0.8800 resistance area.

Recently, the EUR/JPY has been trading downwards. The price tested the level of 124.54. Anyway, according to the 4H time frame, I found that yesterday's low held successfully and that EUR/JPY is in short-term uptrend. I applied Bolinger Bands, and the price rejecting from the middle line, which is another sign of strength. Watch for buying opportunities. The upward target is set at the price of 125.75

The EUR/USD pair pipped us out yesterday and printed new highs 100 pips higher at 1.1122 levels. The pair might have completed wave (2) at a larger degree now and it is also seen to be testing a trend line resistance (not shown here) at the moment. We shall take a cautious approach to initiate short positions but please watch out for any bearish signal around the current levels which could trigger a sell-off. Potential wave counts now could be waves 1 and 2 on the down side as labelled here and that wave 3 could possibly resume till prices stay below 1.1122 levels. Resistance is seen at 1.1122/30 levels while support is at 1.1063 levels respectively. Only if bearish confirmation is received around these levels, we would like to initiate short positions.

Trading plan:

Please remain flat for now but prepare to sell again on bearish signal confirmation, with risk above 1.1125 levels.

GBPUSD chart setups:

Technical outlook:

The GBP/USD pair looks to be ready with waves (1) and (2) as labelled on the hourly chart above. Please note that the drop from 1.2988 through 1.2838 levels looked impulsive while the rally turned out to be corrective in nature A-B-C. If prices remain below 1.2988 levels going forward, GBP/USD will be in for a drop much lower and deeper in the short term. At the moment, the structure looks to be quite convincing as wave (1) and (2) with bears expected to take control back from here on. Besides, prices are stalling at the fibonacci 0.786 resistance levels and a confirmed bearish signal here would warrant short positions or at least add to it. As an alternative though, a break above 1.2988 levels would indicate that bulls have not done yet with their counter trend termination.

Recently, Gold has been trading upwards. As I expected, the price tested the level of $1,248.84. The price is heading higher since the breakout of a flat base in the background. My advice is to watch for buying opportunities. The upward target is set at the price of $1,264.50 (Fibonacci retracement 61.8%).

Recently, the EUR/JPY pair has been trading downwards. The price tested the level of 124.54. Anyway, according to the 4H time frame, I found that yesterday's low held successfully and that EUR/JPY is in a short-term uptrend. I added Bolinger Bands and price was rejected from the middle line, which is another sign of strength. Watch for buying opportunities. The upward target is set at the price of 125.75

USD/CAD retraced towards 1.3600 after a surge towards 1.3800. The greenback is stronger than the loonie on the back of some positive economic reports. Today we have the manufacturing sales report from Canada which is expected to be positive at 1.1% versus the previous reading of -0.2%. At the same time, the United States will present the crude oil inventories report which is expected to be at -2.5M versus the previous -5.2M. The economic events of CAD and USD is expected to bring in good amount of volatility due to the high impact intensity. A daily close today will lead to a certain direction in this pair where USD has an upper hand over CAD.

Now let us look at the technical view. The price is currently residing above the event level of 1.3600 and seems to be correcting itself ahead of CAD and USD high impact news today. Currently we are in bullish bias as the price is above 1.3600 and looking forward for the price to climb towards 1.3800-1.4000 resistance area. On the other hand, if the price closes below 1.3600, then we will be looking forward to sell with a target towards 1.3260 support level. A daily close today will determine the upwards move in this pair.

The latest weekly American Petroleum Institute (API) inventory data were better than expected. For the week ending May 12th, API reported a build of 880k barrels, while the market participants expected another draw of 2,000k barrels, following the substantial draw of 5,790k barrels reported last week. As we remember from earlier this week, Iran stated a willingness to support the extension of the oil production cuts if the other members of OPEC organization will agree to extend cuts as well. For now, the recent joint announcement by Russia and Saudi Arabia about a nine-month extension of the OPEC production has helped the crude oil to rally higher, but any build up in inventories might again push the prices below the $50 level. The next important data are scheduled at 04:30 pm GMT today and it will be the EIA Crude Oil stockpiles report. If the EIA data also reports a build for the week, there will be an underlying dip in confidence surrounding falling inventories.

Let's now take a look at the Crude Oil technical picture on the H4 timeframe. The price dipped slightly below the $48.24 support, but rebounded quickly and now it is trading above this level. Nevertheless, the momentum indicator still points to the downside and if the stockpiles will be bigger than anticipated, then the market might test another technical support at the level of $47.31. Only a sustained breakout above the 61$Fibo at the level of $49.93 will change to immediate outlook from bearish to bullish.

The Preliminary GDP data from Japan might increase volatility of Yen pairs. The data are scheduled for release at 01:50 am tomorrow night and market participants expect an increase in GDP from 0.3% q/q to 0.4% q/q. This means the economy is expected to grow for a fifth consecutive quarter. If the forecasts are correct, the-better-than expected GDP will secure the view, that Japan is on a sustainable path of moderate growth amid the tailwinds like the global economic recovery and a weak Yen. This point of view is supported by the recent upbeat data from service and manufacturing sectors of the Japanese economy.

Let's now take a look at the USD/JPY technical picture on the H4 timeframe. The market is still in a corrective cycle and it is about to hit the 38% Fibo retracement of the latest swing up. The momentum indicators point to the downside, but the market conditions look oversold already, so the level of 112.06 might be the corrective cycle target for a reversal. However, if the data are worse than expected, then the market might break out below this level and head lower towards the next Fibo support at the level of 111.23.

The Dollar index remains in a bearish trend breaking to new lows as each level of support we mentioned failed to hold. Price is now heading towards our second target of 97.50-97.

A few days back I mentioned that the USDX should bounce from 99 otherwise we will see 98.50 being tested and most probably broken. The bearish scenario came through and support at 98.50 failed to hold. Price is now making new lows. Trend is bearish. Bulls did not manage to reverse the trend and break resistance.

Red line - resistance

Green line - long-term trend line support

As mentioned earlier this week the weekly candle could manage to get back above the long-term green trend line support and got rejected. A move towards the weekly Kumo at 97 was expected. This is now what we get. Price is now testing the upper cloud boundary at 97.50-97. This is strong weekly support.

Short-term trend has changed to bullish in Gold as price has broken out of the 4-hour cloud resistance as expected. Gold price is approaching our target area of $1,250-60 where the important medium-term resistance is found.

Blue lines - bearish channel (broken)

Gold price is breaking out above the Ichimoku cloud on the 4-hour chart. Trend is now bullish in the 4-hour time frame. Short-term support is at $1,217 and at $1,233. Resistance is at $1,250-60.

As mentioned last week, the RSI was giving bullish divergence signals similar to when Gold price was at $1,194. Price responded the same way and is now more than 20$ higher from recent lows. Gold price has resistance at $1,254 where the daily kijun-sen is found and at $1,260 where the 61.8% Fibonacci retracement is. Breaking above these levels will be very bullish. A rejection here could push Gold back to $1,220.The material has been provided by InstaForex Company - www.instaforex.com

The US Dollar is losing ground on Wednesday in reaction to a political scandal in Washington. The stock market is put under the pressure be the worsening sentiment. The Shanghai Composite lost 0.2%, while Nikkei is down 0.6%. A weak API report lowers crude oil prices. In that situation, gold is appreciating, trading at the level of $1243 at the time of writing.

On Wednesday 17th of May, the event calendar is bereft of any important economic data, but market participants will pay attention to the claimant count change from the UK, the consumer price index from the eurozone and the manufacturing sales from Canada.

Analysis of GBP/USD for 17/05/2017:

A set of data from the UK's labor market, including the claimant count change, is scheduled for release at 10:30 am GMT. Market participants expect, that the unemployment rate will remain unchanged at the level of 4.7%, but the average earnings index should increase from 2.3% to 2.4%. The number of individuals who are out of work and who are claiming some sort of unemployment benefit is expected at the level of 10K people, while last month this number was 25.5K people. A softer conditions on the labour market will give the Bank of England an excuse to keep low-interest rates intact for some time.

Let's now take a look at the GBP/USD technical picture on the H4 timeframe. The market is still trading between the levels of 1.2281 - 1.2963, just above the golden trend line. There is a clear bearish divergence visible between the price and the momentum oscillator, so the bias remains to the downside. In case of a breakout, the market should test the technical support at 1.2844 and 1.2828. Only a sustained break below the level of 1.2772 would change the long-term bias to bearish.

Analysis of EUR/USD for 17/05/2017:

The consumer price index data is scheduled for release at 11:00 am GMT and market participants expect no change in CPI (1.9%) and Core CPI (1.2%). Importantly, any increase in inflation will give a food for thought for the ECB regarding their current interest rates policy.

Let's now take a look at the EUR/USD technical picture on the H4 timeframe. The market is still advancing despite the overbought market conditions. The immediate support is seen at the level of 1.1022, but so far no signs of a reversal have been seen on the chart. The long-term technical resistance lies at the level of 1.1298.

Market snapshot: USD/CAD hits 50% retracement

The USD/CAD pair has hit the 50% Fibo retracement of an upswing from 1.3223 to 1.3794. The oversold market conditions and a slight bullish divergence might indicate a possible bounce from this level. In that case, the next technical resistance is seen at 1.3601 and then at 1.3640.

Since April 2016, the USD/CAD pair has been trending upward within the depicted ascending channel.

In December 2016, a bullish breakout above 1.3300 (50% Fibonacci level) was expected to allow a further advance toward 1.3700-1.3750 (the upper limit of the depicted channel).

However, significant bearish rejection was expressed around 1.3580 (recently established top).

During the bearish pullback, the price level of 1.3300 (50% Fibonacci Level) failed to provide enough support to the pair.

This allowed a further bearish movement toward the price level of 1.2970 (61.8% Fibonacci level) where a valid BUY entry was offered in February 2017.

A few weeks ago, the bullish breakout above 1.3300 (50% Fibonacci Level) enhanced a further advance toward 1.3440 and 1.3580.

As long as, the USD/CAD pair maintains bullish trading above 1.3580 (confluence of prominent tops). Expected bullish target would be located around 1.3950 and 1.4030 (the upper side of the depicted channel and FE 100%).

USD/JPY is under pressure. The pair recorded lower tops and lower bottoms since May 16 and broke below a rising trend line since May 12, which confirmed a negative outlook. The downward momentum is further reinforced by the declining 20-period and 50-period moving averages. The relative strength index is heading downward.

Therefore, as long as 113.20 holds on the upside, look for a further drop to 112.25 and even to 112.00 in extension.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 112.25. A break below this target will move the pair further downwards to 112.00. The pivot point stands at 113.20. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 113.55 and the second one at 113.80.

USD/CHF is under pressure. The pair recorded lower tops and lower bottoms Since May 11, which confirmed a bearish outlook. The downward momentum is further reinforced by the descending 20-period and 50-period moving averages. The relative strength index broke below the oversold level of 30.

On the economic data front, housing starts unexpectedly declined to 1,172K in April compared with a revised 1,203K last month. Building permits declined to 1,229K in April compared to a revised 1,260K in the prior month. U.S. industrial production rose 1% in April, higher than the forecasted 0.4% increase compared with a downward revision of a 0.4% increase last month. Finally, Capacity utilization climbed to 76.7%, the highest since August of 2015.

Hence, as long as 0.9910 is not surpassed, expect a further decline to 0.9800 and even to 0.97700 in extension.

We have seen a direct break above 1.6020 confirming that wave [ii] completed early and wave [iii] higher towards 1.6655 now should be developing. That said, we would like to see upside acceleration to confirm that we are indeed in wave [iii] of iii/ of iii higher. This means minor support seen at 1.5962 max. 1.5803 should be able to protect the downside for the expected acceleration higher.

R3: 1.6469

R2: 1.6354

R1: 1.6200

Pivot: 1.6020

S1: 1.5962

S2: 1.5803

S3: 1.5764

Trading recommendation:

We are long EUR from 1.5665. We will move our stop higher to 1.5800. If you are not long EUR yet, then buy near 1.5962 and use the same stop at 1.5800.

GBP/JPY is expected to continue the downside movement. The pair broke below its rising 50-period moving average as well as an ascending trend line and is consolidating. The 20-period moving average is turning down, while the relative strength index is below its neutrality level at 50.

As long as 146.30 holds on the upside, look for a further drop towards 145.20 and even 144.90 in extension.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 145.20. A break below this target will move the pair further downwards to 144.90. The pivot point stands at 146.30. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 147.00 and the second one at 147.35.

NZD/USD is expected to trade with a bullish bias above 0.6860. The pair posted a rebound from 0.6859 (the low of May 16). The 20-period moving average crossed above the 50-period one, which indicated a positive signal. The relative strength index is above its neutrality level at 50.

To conclude, as long as 0.6860 holds on the downside, expect a new upside to 0.6920 and even to 0.6950 in extension.

The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 0.6920 and the second one at 0.6950. In the alternative scenario, short positions are recommended with the first target at 0.6835 if the price moves below its pivot points. A break of this target may push the pair further downwards, and one may expect the second target at 0.6815. The pivot point is at 0.6860.

The b-wave of the expanded flat moved slightly higher than anticipated, but it has not changed our outlook. We are now looking for wave c below 122.94 to complete wave B. This will set the stage for the next strong rally in wave C towards 138.52.

Short term, we expect minor resistance seen at 125.10 to cap the upside for a break below minor support seen at 124.56 to confirm the expected decline to below 122.94.

R3: 125.82

R2: 125.57

R1: 125.10

Pivot: 124.76

S1: 124.56

S2: 124.34

S3: 124.13

Trading recommendation:

We took a nice little profit at 125.25 (profit 71 pips) and sold EUR at the same time, so we now are short EUR from 125.25. We will place our stop at 125.20. Take profit will be placed at 123.00.

When the European market opens, some economic data will be released such as German 30-y Bond Auction, Final Core CPI y/y, Final CPI y/y, and Italian Trade Balance. The US is due to present Crude Oil Inventories. Amid this background, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1146.

Strong Resistance:1.1140.

Original Resistance: 1.1129.

Inner Sell Area: 1.1118.

Target Inner Area: 1.1092.

Inner Buy Area: 1.1066.

Original Support: 1.1055.

Strong Support: 1.1044.

Breakout SELL Level: 1.1038.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

In Asia, Japan will release the Revised Industrial Production m/m and Core Machinery Orders m/m. The US is due to present Crude Oil Inventories. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 113.23.

Resistance 2: 113.01.

Resistance 1: 112.79.

Support 1: 112.51.

Support 2: 112.29.

Support 3: 112.07.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

The NZD/USD pair will keep to move downwards from the level of 0.6935 (resistance). The pair fell from the level of 0.6935, which coincides with the ratio of 50% Fibonacci retracement, to the bottom around 0.6817. The first resistance level is seen at 0.6873 (the daily pivot point) followed by 0.6907, while daily support 1 is found at 0.6817.

Besides, the level of 0.6907 represents a weekly pivot point for that it is acting as minor resistance. Amid the previous events, the pair is still in a downtrend.

The NZD/USD pair is declining from the new resistance line of 0.6907 towards the first support level at 0.6817 in order to test it. Hence, we recommend to sell below 0.6907 with the first target at 0.6718 in order to test yesterday's bottom.

If the pair succeeds to pass through the level of 0.6817, the market will indicate a bearish opportunity below the level of 0.6817 in order to continue towards the next objectives of 0.6780 and 0.6750. However, if a breakout happens at the resistance level of 0.6907, for that you should set your stop loss at 0.6935.

The market opened below the weekly pivot point (0.9893). It continued to move downwards from the level of 0.9893 to the bottom around 0.9841. Today, the first resistance level is seen at 0.9948 followed by 0.9999, while daily support 1 is seen at 0.9787. The USD/CHF pair broke support which turned to strong resistance at 0.9948. Right now, the pair is trading below this level. It is likely to trade in a lower range as long as it remains below the support (0.9948) which is expected to act as major support today. This would suggest a bearish market because the moving average (100) is still in a negative area and does not show any signs of a trend reversal at the moment. Amid the previous events, the USD/CHF pair is still moving between the levels of 0.9893 and 0.9710, so we expect a range of 183 pips in coming hours. Therefore, the pivot can be found at 0.9893 providing a clear signal to sell with a target seen at 0.9787. If the trend breaks the minor support at 0.9787, the pair will move downwards continuing the bearish trend development to the level of 0.9710 in order to test the daily support 2. Overall, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 0.9948.

EUR/USD: The EUR/USD pair made some bullish attempt on Monday and Tuesday. Price has gained more than 170 pips, which has resulted in a clean Bullish Confirmation Pattern in the market. The next targets for bulls are located at the resistance lines at 1.1100 and 1.1150, which would be reached before the end of this week.

USD/CHF: A bearish signal has been finally generated on USD/CHF. Price has come down by 150 pips this week, testing the support level at 0.9850, and the support level would soon be breached to the downside, as price goes towards another support level at 0.9800.

GBP/USD: The GBP/USD pair has continued to move sideways this week. The sideways movement is expected to end this week or next, as price goes above the distribution territory at 1.3000 to form a bullish bias; or the price may go below the accumulation territory at 1.2800, to form a bearish bias. A strong directional movement would be needed to make either of this happen.

USD/JPY: This currency trading instrument has been able to retain its bullishness in spite of its short-term sideways movement (though things are going precarious). A movement above the supply level at 114.00 would result in a stronger bullish outlook, while a movement below the demand level at 112.00 would result in bearish outlook.

EUR/JPY: There is a Bullish Confirmation Pattern on the EUR/JPY cross. The EMA 11 is above the EMA 56, and the RSI period 14 is above the level 50. Price has gone further upwards this week, now above the demand zone at 125.00, going towards the supply zone at 126.00. The aforementioned supply zone may even be breached to the upside.

USDX had a strong decline on Tuesday and it's consolidating well below the 98.20 level. The support zone of 98.08 is now the area where buyers will try to correct the recent decline. If that level gives up, then we can expect a downside acceleration towards the 97.50 level. However, if the corrective move happens, the resistance zone of 98.55 is a feasible target to the upside.

H1 chart's resistance levels: 98.55 / 99.15

H1 chart's support levels: 98.08 / 97.50

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 99.15, take profit is at 99.50 and stop loss is at 98.81.

GBP/USD is hovering in a sideways range across the board, with a support found around the 1.2855 level. Overall, the path is not clear and one could expect another rally to test the 1.2957 level. While our outlook remains bullish, we can expect further downside only if the Cable manages to break below the 1.2855 level, targeting the 1.2772 zone.

H1 chart's resistance levels: 1.2910 / 1.2957

H1 chart's support levels: 1.2855 / 1.2652

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.2910, take profit is at 1.2957 and stop loss is at 1.2887.

The price has risen further and is now approaching major resistance at 84.51 (Fibonacci extension, Elliott wave theory, horizontal swing high resistance, bearish divergence) and we expect a drop from this level towards the 84.07 support (Fibonacci retracement, horizontal pullback support).

Stochastic (89,5,3) is seeing strong resistance at 94% and also sees bearish divergence vs the price signalling that a reversal is impending.

The price reversed right below our stop loss and is now at our entry once again. We remain bearish below the 0.6883 resistance (Fibonacci retracement, Fibonacci extension, horizontal pullback resistance) for a push down to the 0.6826 support (Fibonacci extension, horizontal swing low support).

Stochastic (34,5,3) is seeing resistance at 94% where it has turned down from with a great downside potential.

Correlation analysis: NZDUSD and AUDUSD are positively correlated meaning they usually move together in the same direction. We are expecting a drop on AUDUSD and a drop on NZDUSD so this goes very well in line with our correlation.

The USDJPY pair provided some slight positive attempts yesterday, but it did not reach 113.97 levels starting today with bearish bias approaching from the EMA50 again. Stochastic lost its bullish momentum and began to provide negative overlapping signal on the four-hour time frame. Therefore, we will continue suggesting the bearish trend in the upcoming sessions, which targets testing 112.45 followed by 111.65 levels mainly. A breach of 113.97 will stop the suggested negative scenario and push the price to return to its main bullish track again. The expected trading range for today is between the 112.45 support and the 114.00 resistance.

In spite of the GBPJPY price stability above the initial support at 145.45 levels, we notice the slowness of the bullish trading due to a lack of bullish momentum until this moment. We expect a positive crawl until gaining the required momentum, which allows it to push the barrier at 148.45. The price is likely to breach this level recording new targets that begin at 15.35. We should mention that the price attempt to decline below the current support will delay the bullish rally, which forces it to provide an intraday negative correction until testing the 23.6% Fibonacci correction level at 143.30. The expected trading range for today is between 146.05 and 150.35.The material has been provided by InstaForex Company - www.instaforex.com

The gold price keeps its stability above 1,229.32 levels and above the correctional bearish trend resistance keeping the bullish trend active for today. The price is likely to test 1,254.56 levels initially. A breach of this level will open the way to head towards 1,295.37 as the next main station. Therefore, we will continue to suggest the bullish trend in the upcoming sessions unless breaking and holding below 1,229.32 levels. The expected trading range for today is between the 1,225.00 support and the 1,250.00 resistance.

The silver price settles above 16.56 levels. The 16.80 barrier is still forming an obstacle against the price attempts to rise, while stochastic attempts to get rid of its negativity and gain the positive momentum on the four-hour time frame. Therefore, the bullish trend scenario will remain suggested in the upcoming period unless breaking and holding below 16.56 levels. Our next main target is located at 17.43. The expected trading range for today is between the 16.56 support and the 16.90 resistance.